NEW DELHI – India's Income Tax Department launched a nationwide verification drive on August 18, 2026, targeting 394 entities and 36 professionals suspected of involvement in suspicious foreign remittance activities. The investigation focuses on organizations that have sent substantial amounts of money abroad despite reporting minimal business activity or failing to file income tax returns.
Extensive Verification Exercise Underway
The Central Board of Direct Taxes (CBDT) confirmed the commencement of this detailed exercise, which follows an earlier search operation linked to fictitious charitable trusts allegedly facilitating bogus donations. Data analysis and ground intelligence had identified numerous suspicious entities that remitted significant foreign exchange over the past three years, often without proportionate turnovers or tax filings.
The current verification aims to identify potential shell entities, the individuals behind them, and the professionals responsible for issuing Form 15CB certificates for these overseas payments.
Key Suspicions and Findings
Preliminary checks revealed that many entities involved in the foreign remittances were either non-filers or reported turnovers inconsistent with the amounts sent overseas. The stated purposes for some remittances, such as freight, software imports, and consulting services, also appeared incongruent with the entities' financial profiles.
Furthermore, ground-level intelligence indicated that several entities were not operating from their officially declared addresses, reinforcing concerns about their legitimacy. The investigation specifically covers 394 entities, including 117 located in states along India’s land borders, alongside 36 professionals.
Scrutiny of Form 15CB Certificates
A crucial aspect of the probe involves the examination of Form 15CB certificates, which are required for foreign remittances. These certificates mandate an accountant to verify the taxability of a remittance based on the taxpayer's financial records. The department observed a concentration of these certifications among a small group of professionals, with funds often received by clustered groups of overseas entities.
The CBDT has raised questions about whether adequate due diligence was performed before these certificates were issued. Under the Income-tax Rules, 2026, Form 146 read with Rule 220 now corresponds to the earlier Form 15CB and Rule 37BB framework.
Warning to Certifying Professionals
The CBDT has emphasized that accountants issuing Form 15CB or Form 146 certificates must exercise due care, diligence, and professional judgment. They are expected to thoroughly examine underlying transactions, supporting documents, and relevant facts before certifying foreign remittances. The department underscored the critical role these certifications play in maintaining trust and compliance within the tax system.
Investigations into the identified entities, transactions, and professionals are ongoing, with further actions to be determined based on the findings of this comprehensive verification exercise.